THAI cautious about expansion despite strong cashflow in Q3
Thai Airways International Plc (THAI) has reported strong cash flow in the third quarter, but the national carrier plans to exercise caution in expanding its operations due to debt repayment obligations.
"While Thai Airways has a substantial amount of cash on hand, we cannot rest easy. We still need to reduce expenses and manage costs effectively because external factors, such as the global economic situation, the Israel-Hamas conflict, and the yet-to-recover Chinese market, remain uncertain,” Piyasvasti Amranand, the chairman of the committee overseeing the airline's rehabilitation, said. “Moreover, the existing cash reserves will need to be utilised to meet upcoming debt obligations. In the next year, Thai Airways will begin repaying a significant portion of its debt," he added.
Despite Thai Airways' ability to generate profits and increase cash flow continuously, the airline is cautious about expanding its business as significant cash flow is necessary to service principal and interest debt as per the planned business recovery.
In 2024, Thai Airways will have to prepare to pay off a substantial debt of almost 10 billion baht.
THAI reported a 12.6 per cent growth in revenue in the third quarter, year on year, amid the ongoing recovery of the global aviation industry due to the increasing demand for air travel.
Thai Airways and its subsidiaries generated total revenue of 37.01 billion baht, up from 32.86 billion baht in the same period last year.
The airline reported net profit of 1.55 billion baht, a complete turnaround from the net loss of 6.33 billion baht in the previous year. Thai Airways accounted for most of the profit at 1.54 billion baht.
The airlines flew 3.27 million passengers — 2.19 million by Thai Airways and 1.08 million by Thai Smile. The average Cabin Factor, representing the passenger load factor, was 77.3% (Thai Airways 77.1% and Thai Smile 80.9%), closely aligning with the averaged 77.0% in the same period in the previous year.
Piyasvasti said the current business overview indicates continuous revenue growth and profit stream. Currently, cash flow is high at 63 billion baht, and it is anticipated that the company's full-year performance this year will reach 150 billion baht, an increase from the accumulated revenue of 110 billion baht in the first nine months of this year.
Revenue for next year is estimated to return to pre-Covid-19 levels at 180 billion baht, and is expected to continue growing until 2025, surpassing the pre-Covid-19 levels.